Importance of car insurance polices

In India, car Insurance is mandatory and since it is to be renewed every year, it is important that you get the best car insurance rates. There are many different insurance coverages available in the market. It is important to get the coverage that covers all the parts of your car from a cracked windshield to a highly collateral damage. But, you never know the coverage rate as that might be as per the accident.

With so many companies to choose from, doing a check for all the car insurance policies can be quite a task. You can get the cheapest car insurance policy by comparing premiums and features of various plans, through comparison that is completely un-biased and finding an instant policy issuance. But first it is important to understand the meaning of car insurance and the types of car insurance policies.

What is car insurance?

It means insuring the financial risk involved while operating the car. As you know, the car might meet with an accident or may get lost or stolen. In such a situation, the losses may be compensated by the insurance company, if it is covered under auto insurance policy. This is a part of the provisions of Auto Vehicles Act, according to which the car insurance must cover the amount for the third party in case of any accident. But it may or may not cover the damages of the car owner.

Majorly there are 2 types of car insurance policies, let’s understand them:

1) Third Party Car Insurance Policy –

This policy only covers the third person who has been injured in an accident, in a case where the owner of this insurance policy is accountable. In this situation, only the minimum risks are to be covered under the Auto Vehicles Act 1938 (Act Liability). That covers the third parties’ loss caused by an accident. It never covers the expenses, damage, theft or injuries of the owner. By the law of India, this plan is made compulsory.

2) Comprehensive Car Insurance Policy-

This plan has a wider scope as it covers all the liabilities along with the insured person’s damage, expenses, theft, and injuries as a result of a car accident. This policy can be extended to increase benefits which is an additional feature. It is advisable to opt for a comprehensive insurance policy as it also covers the repairing costs of the damage caused to your car.

Benefits of having a car insurance policy:

1. Zero Depreciation Cover

Zero depreciation on car insurance

Suppose you are involved in an accident in Delhi, in case you need replacement of some parts of your car, the insurance plan pays you the depreciated value of the part and not the invoice value of the part. The Insurance companies usually offer this value added cover for cars which are 2 to 3 years old. This benefit also comes with a small increase in premium.

2. Invoice price cover or “Return to Invoice” cover

In case of a severe damage, that means a “total loss” of your car, the insurance companies will only pay you the depreciated value of your car and not the amount price to purchase a new car. Companies also pay the road tax and registration costs with this cover. This is available only for cars which are 2 to 3 years old and can be availed by paying extra premium.

3. No Claim Bonus Protection

Suppose you have not made any claims in your policy, you get discounts on renewal of the policy in the form of No-claims Bonus. It leads to substantial savings in your renewal premium. In case, a good No-claims bonus % is accumulated, you will be able to carry on your No Claim Bonus % on renewal.

4. Emergency Assistance

There are various assistance services which insurance companies offer as add-on covers. Imagine getting stuck with a cracked windshield on a trip from Hyderabad to Ramoji, insurance policies also include emergency transport, where experts provide assistance. Even if you run of out fuel, assistance in case of a flat battery, towing facilities, taxi benefits to name a few, the company will be there. Small measures which can actually be very handy when you are stranded.

A large section of our population owns car and is continuously growing. Even if a person drives carefully, there are chances of an accident. It’s the best way to prevent financial expenses that one incurs for repairs, which will be covered by the insurance company.

The people who delay or ignore buying a good car insurance plan are taking a grave risk. Car insurance is necessary to protect you & your car against unforeseen events.

Image Source: thecheaperinsurance.com, charteredclub.com, thirdspartyscarsinsurance.com, elfcarinsurance.com, myinsuranceclub.com, i.ytimg.com

Content Source: Windshield Experts

 

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